Brent traded above $71 a barrel after tumbling 3.8% last week, while West Texas Intermediate was near $67. Weak Chinese consumption has impacted sales of Angolan crude for December, while forecasters including the International Energy Agency see the prospect for a sizeable supply glut next year.
Oil has swung between gains and losses since mid-October, with hostilities in the Middle East at times raising fears of an escalation and potential disruptions to supply. A stronger dollar has added to the bearish headwinds, with an index rallying to the highest level in almost two years last week.
“Market participants continue to fret over the prospects for higher supplies from the US and OPEC+” and the outlook for China’s economy, said Jun Rong Yeap, a market strategist with IG Asia Pte. “There’s not much of a bullish catalyst for oil prices to ride on.”
Investors are monitoring developments on Russia’s war in Ukraine, with allies pushing Volodymyr Zelenskiy to consider new ways to engage Vladimir Putin to negotiate an end to the conflict. The US is also nearing a decision to lift some restrictions on Ukraine’s use of Western-made weapons to strike limited military targets in Russia, according to people familiar.
